Negotiation: turning up the heat
Article Date: Apr 22 2008Sometimes it pays to be nasty. In the early days of commercial television, I worked in a small agency in the media department, which meant I had to do a little of everything while our larger competitors had specialist buying departments, recalls Chris Ingram.
The bigger agencies were seen as rough, tough and nasty, but I was really keen to further my media education and so became determined to join an organisation with a reputation for hard negotiating. A job offer came quite quickly and I snapped it up: they wanted my thoughtful planning skills and I wanted their street-smart buying skills.
I soon saw the plus side of their approach – they had overall negotiating strategies with each media group, ensuring close co-ordination between all the buyers and a concentration of power. This was not always to the benefit of their clients, but they were playing hardball with the media and there were no exceptions.
First appearances could lead you to think only brute force was being used. It was, however, more sophisticated than that. There were lengthy meetings to agree strategy before each negotiation and every possible scenario was well thought through, with agreed fallback positions for each.
It quickly became clear to me why my creative but unfocused approach to negotiation did not work within this well-oiled machine. I learned the benefit of making threats: ‘If you don’t give us this deal, you won’t get another penny from us!’
I was surprised how often this in-your-face style of negotiation worked, even though it was often bare-faced bluffing. I began to realise that the media owners who responded to the most basic form of bullying were those I had been least aggressive towards in my previous job.
This was a style I didn’t have – and didn’t want – but I was pragmatic enough in later years to hire a smattering of “buying gorillas” on the team. The air was blue and quite a few phones were broken, but I’d learned that, for certain types of people, heavy-handed threats work. So, if you’re not too squeamish, the ideal is to have a team with a blend of personalities which you can match to each situation.
Watching the clock
I also learned that, although ‘time is the enemy’, you can make it your friend. Time and space are perishable commodities and ads that are lost one week can rarely be made up later – that money is either not spent or it goes to someone else. As with so many businesses – airlines, hotels, theatres – a very high proportion of profits rest on filling that last bit of capacity.
So we would keep negotiating and negotiating on Friday evenings for the remaining pages and spots available for that weekend; despite the sales reps
being strongly motivated by incentives to sell the remaining availability, they
were also desperate to start their weekend and would often capitulate on price
in order to get home.
Bullying conjures up images of implied violence, or at least damage, to the well-being of a company and its employees. This certainly happens in business, particularly with those who feel they can throw their weight around. But much of it is psychological and that can be just as effective.
In the final years of my media agency Tempus, before we sold, I had started to build a collection of modern British art and sculpture. Much of this is hard and edgy, heavily influenced by the two World Wars. We had several meeting rooms in the head office and I dressed some of the rooms to have an uneasy feel to them and others to be extremely relaxing.
Pressure points
Less subtly, a former colleague of mine started a beverage business and, after some early success, he met with the buyer from one of the big four supermarkets. When he arrived he was startled to find in reception a board on the wall, with two columns on it, saying “Those we like this week” and “Those we don’t like this week”. His knees were almost knocking as he looked for his name on the board. He then had to wait 30 minutes in a tiny meeting room before the buyer deigned to see him. By then he was ready to give his lowest possible price before the meeting even started.
Negotiating with suppliers is completely different from negotiating corporate deals, but it’s surprising how easily people forget this. They negotiate on everything and try to win every point. Instead they should concentrate on the points that are commercially significant to them and ensure that they win. Conceding the other points is great for maintaining goodwill.
I remember looking to set up a deal with a well-known businessman in South East Asia. We were new to the region and he held nearly all the cards, a position that he exploited mercilessly. Each time we thought the joint venture (JV) had been agreed, he’d come back asking for more concessions.
It left a sour taste in our mouth and, once the JV was established, our regional CEO found it easy to be unhelpful whenever his co-operation was needed.
The saying “Always leave some meat on the bone” is great advice. It isn’t weakness, it’s good business sense and a lot of retail buyers could learn this lesson.
Click here to read more from Chris Ingram on negotiating skills.
